Policy Approaches to Undernutrition Text adapted from The

Policy Approaches to Undernutrition Text adapted from The World Food Problem Leathers and Foster, 2009 http: //www. amazon. com/World-Food-Problem. Toward-Undernutrition/dp/1588266389

Ethics: Pope John Paul II • “Contrasts between poverty and wealth are intolerable for humanity” • “It is the task of nations, their leaders, their economic powers and all people of goodwill • to seek every opportunity for a more equitable sharing of resources” – Example of Beneficence • Personal moral duty to help the poor http: //schoolnet. gov. mt/liceovassalli/mav/MAV%20 Zones/Students/Essays/Pope%20 John%20 Paul%20 II. jpg

Ethics: Right to Food? • Right to Food – Included in International Covenant on Economic, Social and Cultural Rights – Adopted by UN – Signed by 85 countries • Now must address hunger issue United Nations http: //orrinwoodward. blogharbor. com/United%20 Nations%20 Assembly. jpg – to protect fundamental rights of society – Don’t need to feel personal moral duty to help the poor

Ethics: Right to Food? • Rights taken very • • Feeding orphans, Yemen http: //www. yobserver. com/uploads/1/orphans 5. jpg seriously Absolute entitlement Non-negotiable Would require government to act to prevent hunger Conflict with property rights?

Economist’s Questions • What is the appropriate policy for society as a whole? • How can government best manipulate human greed to achieve its policy objectives? http: //neweconomist. blogs. com/photos/uncategorized/20061110_inside_the_economists_mind_cove. gif

How to Move Society Forward Economists give advise on how to do this Government Manipulate self-interest to achieve policy goals Economy Capitalism Ideology Self-interest

Economics Policy Decisions • Every action has costs and benefits • Marginal costs and benefits – For 1% increase in cost, what is the increase in benefits? • Ideal decision: where marginal costs = marginal benefits • Free market will allocate resources optimally, but Three Gorges Dam, China http: //www. thelightisgreen. com/China%20 Three%20 Gorges%20 Dam%2001. jpg – Without concern for • Social costs • Environmental costs – Can everything be put in dollar terms?

Externalities • Costs and benefits sometimes go to people outside the market transaction – Should wealthy benefit from costs borne • By the poor? • By the environment? http: //wheresmyamerica. files. wordpress. com/2007/08/smoke-stack 1. jpg

Every action has costs and benefits • How much would you pay for… – A human life? • Speed limit 10 MPH? • Nutrition for every man, woman, and child? – – http: //www. superkidsnutrition. com/app_themes/sba_nutrition/images/NA_Protect. Self. From. Pesticides. jpg Food without pesticide residue? No pollution? Freedom? Fair trade?

Harnessing greed in policy • Economic incentives – Can make it more expensive • To have children • To degrade the environment – Need property rights • Production increases with reward – If we eat less: • other countries won’t benefit • Farmers will produce less • As demand increases – efficiency increases • Products made available more cheaply • Alternatives found http: //sheepwaker. tripod. com/greed. jpg

Policy to reduce undernutrition? • 250 Calories/day would erase Calorie deficit of hungry – Cost 35 cents/day/person – = $6, 400 invested at 2% interest – Value of Human Life? • For 800 million people, this policy would – Increase food prices – Increase environmental costs of food production http: //www. pbs. org/newshour/images/africa/july-dec 07/1126_somalia_bhead 2. jpg

Policies to raise incomes of poor • Redistribute income from rich to poor – Rationale: declining marginal utility of income • Rich don’t benefit from a dollar spent as much as poor do – But should incomes be equalized? • Improve rate of economic growth http: //www. alliance 2015. org/var/news/storage/images/galleries/world_poverty_map/245 2 -1 -eng-GB/world_poverty_map. jpg – Is Globalization beneficial to developing nations?

Policies to reduce price of food • Population reduction – Demand will rise slower – Food prices will rise slower • Increasing supply – Research investment – Loans to farmers http: //farm 3. static. flickr. com/2300/2198720003_b 56 c 80 b 97 c_o. jpg

Policies to reduce cost of food • Price supports • Sell food to consumers • Subsidies to farmers – Both reduce economic efficiency – Therefore distortionary • Corrective price policies – Example: correcting distortions that reduce food output – Example: To feed hungry has indirect benefit to wealthy • We feel better = externality • No market for this

Aid Policies • Aid can help – If targeted to poor • Example: School feeding – In emergencies • Aid can hurt – If wealthy elites profit from it • makes the problem worse • Often designed to further our national and trade interests • Directed mainly at political allies – not hungry nations http: //www. bread. org/assets/images/learn/food-aid. jpg

http: //static. flickr. com/51/189662626_257 b 15004 f_o. jpg

Aid Policies • Have been used as a lever – to impose “structural adjustment” on foreign trade policies • If foreign countries do not open up markets – or reduce subsidies as directed by U. S. • Aid may stop • Designed to create new markets – foster dependence on U. S. grain • Korea http: //ecx. images-amazon. com/images/I/5111439 M 5 NL. _SL 500_AA 240_. jpg

Aid Policies • When aid is given as free grain – undermines prices for farmers – driving them out of business • Military aid can lead to armed conflicts – that generate hungry people • Well-off divert aid to help themselves http: //www. wfp. org/img/newsroom/afghanistan/310/dscn 0678. jpg – further widening gap between haves and have-nots

U. S. Agency for International Development (USAID) • Started with Marshall Plan after WWII • Principal U. S. foreign aid agency to help countries: – Recover from disaster USAID in Uganda – Escape poverty – Democratic reforms • Partnership with – 3, 500 U. S. businesses – 3, 000 Organizations • $8. 8 Billion

U. S. Foreign Aid • U. S. gave $28 billion (2007) • Largest Donor in world • Less generous based on capacity to give (GNP) • < 0. 22% Federal Budget – Majority think U. S. Aid is 20 X more http: //news. bbc. co. uk/nol/shared/spl/hi/pop_ups/05/business_aid_and_development/img/1. jpg

U. S. Foreign Aid Spending 2009

U. S. Foreign Aid Budget http: //farm 3. static. flickr. com/2389/2429946098_2 f 24950561. jpg

Third World Debt • Forgiving third-world debt – would help countries become self-sufficient • Honduras annual debt payments – exceed amount spent on health and education combined • Total debt payments – greater than foreign aid and foreign investment combined http: //bloodbankers. typepad. com/submerging_markets/chart_intro. 1. %20 Growth%20 of%20 the%20 Debt. jpg

http: //www 1. worldbank. org/devoutreach/spring 01/images 7/hipc_map_7. gif